Mortgage loans expected to rise 10% next year

Economy August 06, 2014 01:00

By Sucheera Pinijparakarn
The Na

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Home loans will resume growth of more than 10 per cent next year as consumers and developers are now able to manage their long-term plans as confidence in the economy is returning, according to the Housing Finance Association.

President Kitti Patpongpibul said yesterday that new housing loans in the second half of this year would begin accelerating by 10 per cent from the first half. Last quarter, new mortgages dropped 10.1 per cent.

Even though new housing loans this year are likely to be even with last year, the association believes outstanding loans this year could increase by 5-6 per cent.

The economy is probably recovering, based on the Bank of Thailand’s residential price index in June against the same month last year, he added.

According to the index in June, prices for detached homes with land increased by 4.8 per cent year on year, for townhouses by 8.3 per cent, condominiums by 9.8 per cent and land by 11.1 per cent.

The junta has prepared a clear road map for shoring up the economy, which is a good beginning for the real-estate industry in laying out long-term plans, Kitti claimed.

Earlier, the industry kept plans short-term as developers were not that confident in political and economic stability.

The association expects investment by the industry will turn to long-term, and this will help support the mortgage business in the next three to five years.

The association together with Home Buyers’ Guide will hold annual home and condo and credit fairs from August 21-24 at the Queen Sirikit National Convention Centre in Bangkok.

More than 300 projects will be showcased at the expo, including resale homes and non-performing residential projects from seven financial institutions and one asset-management company.

The expo this year is expected to receive a good response from customers thanks to the pick-up in consumer confidence. At the event last year, visitors applied for home loans worth Bt11.78 billion.